Chicago-based online travel agency Orbitz Worldwide is seeking buyers for the company, according to a published report.
Bloomberg News reported Tuesday that Orbitz, operator of Orbitz.com and Cheaptickets.com, among other sites, is working with a financial adviser to seek potential buyers.
Shares of Orbitz Worldwide spiked Tuesday, closing up 8.6 percent to $9.95 on the New York Stock Exchange.
Orbitz spokesman Chris Chiames would not confirm the report. “Our company policy is not to comment on rumors and speculation about potential transactions and market activity,” he said.
Orbitz putting itself up for sale makes sense, and it’s not necessarily a bad thing, said Henry Harteveldt, a travel-industry analyst with Atmosphere Research Group.
“I don’t see this as a negative situation,” he said. “This should not be interpreted as an indication that Orbitz is a failing business.”
The travel-booking industry is very competitive and today requires scale and scope that wasn’t required when Orbitz launched in 2001, he said.
“They could be valuable to somebody,” he said.
Potential buyers include other online travel agencies, offline travel agencies that want a big online presence, a foreign company that wants a U.S. foothold or private-equity companies looking to invest in Orbitz as a turnaround project, he said.
However, a for-sale sign on the business ultimately might suggest Orbitz was not able to differentiate itself enough from competitors, such as Expedia and Priceline, and focus on hotel bookings, which are more lucrative than flight reservations.
“Unfortunately, right now Orbitz doesn’t stand for anything,” Harteveldt said. On its launch, Orbitz was a source of great airfares and had some clever advertising through the years, but ultimately wasn’t able to stand apart, he said.
“I’m not surprised somebody could see value in Orbitz, but they’re definitely going to have to invest money to help Orbitz emerge as a stronger, larger, sounder competitor,” he said.
Orbitz, created by major U.S. airlines and later owned by private-equity companies, has been its own company since 2007.
Orbitz shed a huge investor in July when Travelport, a travel technology company, divested itself by selling 34 million shares to new owners. As recently as May, Travelport owned nearly half of Orbitz. Travelport said at the time that its stake in Orbitz was no longer “a strategic investment.”
The divestment of Travelport “removes a potential obstacle” to a sale, Harteveldt said. Travelport over the years probably helped Orbitz with technology and capital but also held it back because of Travelport’s historical focus on the airline sector, he said.